The intentions of the Government may be noble but nothing seems to be happening really. High inflation and rising interest rates are bad combination for equities. These two problems, which are inter-linked, have had an adverse impact on Indian stocks right through the year.
Inflation will continue to be in the spotlight as the Government unveils the figures for May. Consensus estimate is for a print of around 8.5-9%. In April, inflation had softened slightly from the previous month. The market may not react much unless there is a major deviation from this forecast. All eyes are on the RBI’s mid-quarter review on June 16.
The opening looks subdued in the wake of mixed global cues. On Wall Street, the Dow and the S&P 500 just about managed to close in the green while the Nasdaq declined. European stocks finished marginally higher. But, the Euro dipped after S&P downgraded Greece amid mounting worries over its fiscal health. Asian markets are mixed. Chinese shares are up after data shows increase in inflation.
RIL could stay down on the back of the CAG report though it has issued clarifications. Idea may gain after posting strong Q4 earnings.
